Staikouras announces new effort to slash NPLs in 2020

Finance Minister Christos Staikouras announced on Tuesday in an interview with public broadcaster ERT a gradual reduction in the solidarity levy, adding that the final decisions are expected in May based on the fiscal space created.

Staikouras reassured that the revision of the objective values will not hurt the middle class. If objective values in popular neighborhoods increase, the Uniform Real Estate Ownership Tax (ENFIA) will be re-examined, he noted. He also said that after the 22 pct tax reduction, which occurred earlier than initially scheduled, another reduction of 30 pct in average will follow. Moreover, he stressed that tax income collection raised to 85 pct from 80 pct. "By reducing taxation, we are giving citizens an incentive to meet their obligations and at the same reducing tax evasion."

The finance minister said that the current first residence protection scheme will end in April and a new programme for debt settlement will be implemented. In addition, he announced that a second systemic intervention for the reduction of bad loans (NPLs) will be launched next year.

Staikouras also said that the best solution would be to reduce primary surplus targets to 2 pct of GDP adding that the government is discussing with European institutions a mechanism that will allow surpluses to be transferred in the coming year. He also announced the introduction of a bill in January to address the effects of Brexit.

The finance minister said that a debt sustainability assessment is underway, in cooperation with the Public Debt Management Agency, on four pillars: faster growth, lower borrowing costs, early IMF repayment and the use of SMPs and ANFAs.